It starts with asking yourself one question: “What kind of recurring needs do my customers have?”

Tune in to hear the rest of the campaign implementation, as well as a little bit about why Drew favors increasing the number of purchases over the number of overall customers.

Highlights

00:21 – Drew may have ruined his son’s reading habit by introducing him to the world of Star Wars02:40 – Recap: three multiples that will grow your revenue03:20 – Focusing in on frequency. Why more purchases instead of more customers?05:18 – The “1-2 Punch” Email Campaign07:00 – Campaign results example (10% lift!) and why it works so well07:50 – How to get started on setting it up for your biz09:18 – Some ESPs have even easier ways to set the campaign up10:00 – Recommendations for related episodes on frequency

Links / Resources

More ways to increase frequency? Download Drew’s Frequency Mind Map for more ideas.

Transcript

Hey, everybody, this is Drew Sanocki. Welcome to the Nerd Marketing Podcast, Episode 27. I’m talking about increasing your retention today using a technique I call the 1-2 Punch.

Before I get in to that, does anyone have small kids? It’s my 4 year-old’s birthday. He’s really into reading, like loved reading the classics. Yeah, the classics of being 4, a 4 year-old classic, whatever the 4 year-old classics are.

Little House on the Prairie, stuff like that, he’s into it. My wife was thrilled, English major, kid’s reading the classics. We’re out at the beach the other day, and he’s bored with the classics. He’s hyped up so I decided to just tell him the story of Star Wars.

I started, you know, “Okay, so enough about whatever you’re reading, Pride and Prejudice, you know Miss Havisham. Okay, so there are these two spaceships. One attacks the other one and Darth Vader comes off, but there’s a princess who puts the plans in a droid and fire the droids off, and Darth Vader needs to get the plans.” He’s, you could see it in his face.

He was like, “You’ve been giving me Miss Havisham, and there’s this other world out there of like spaceships and lasers and light sabers? There upon ensued, it’s been like a week running now where he’s, every time we go to bed, he does not want to read the classics anymore, and he wants me to tell Star Wars stories. Not even, he’s just stopped reading, he just wants me to talk, so I kind of poned myself because I’ve got to tell the stories now. I’m on the hook. Before I could just toss him a book.

My wife is thrilled now, by the way because that’s all he talks about. He needs to know these various technicalities of what’s going on in the Star Wars series as opposed to lessons learned from classics or something.

Anyway, that’s what I’ve got going on. All this which brings me back to increasing your retention and the 1-2 Punch.

Okay, so we’re going to bring it back to ecommerce here. Bringing it back. There are three ways, three multiples that will grow your revenue. AOV, average order size, frequency of purchase, the number of times somebody buys from you on average, and then the third one, the number of customers. Right?

Three ways, only three. I like focusing on those three.

I wrote a short free course about them at nerdmarketing.com/double, but today we’re going to talk about the second one, increasing your frequency, your customer’s order frequency. How do you get them to buy more often. In stepping back, why would you want this to happen. Why do you want people to buy more often? Why not just go get more customers to by once. It’s because for most ecommerce companies, that first initial purchase from any one customer is rarely profitable.

Think about it. Say your AOV is a hundred bucks, your cogs, your cost of the product you ship may be another hun-, may be fifty bucks. Then, you’ve got a whopping customer acquisition cost of fifty bucks. You know, fifty bucks on ads, say, to pull in one customer to buy. You do the math, you’ve made nothing on that order. It’s not that bad for every retailer, but this is one knocks against ecommerce, customer acquisition cost.

It’s expensive to acquire customers. It may not be fifty. It may be marginally profitable in that first order, but then think about it, if you get that customer to say, sign up to your mailing list where you can then require them or bring them back again for a much cheaper amount than $50, you win. All of a sudden you become profitable, so that customer comes back and buys again through an offer in your email list, same hundred dollar AOV, same $50 cogs, but this time instead of a $50 acquisition cost, the acquisition cost goes down to pennies, whatever it cost to send that guy an email, so you’re profitable on the second order, and third and fourth and fifth.

This is why the more you increase your frequency, you get these customers to come back and buy, it’s just the secret to, it’s the best lever I can think of to growing your company. All of a sudden you get cash flow. You can plow that cash flow into customer acquisition and you can sleep well at night because you’re customers aren’t here today, gone tomorrow.

It behooves you to increase your frequency, and one of the quickest and easiest ways I can think of to do that is what I call a 1-2 Punch Email Campaign. It’s as simple as thinking about your customers and what kinds of recurring needs they have. What kind of needs do they have over time? Either recurring or over time. Example, at Design Public, my home design retailer, I noticed that the women who bought a baby crib in their first purchase subsequently bought baby bedding maybe two weeks later. Obviously that makes sense. You buy the toy; you need the batteries.

You buy the baby crib; you’re going to need bedding. Certainly there are a fair amount that bought them at the same time, but if they didn’t, then it was not uncommon to see baby crib on day one, and on day 14, 15, 16, they came back and bought the bedding. Once they were happy with the crib, probably. I think, “Okay, what kind of email campaign can I come up with to sort of enable that to happen more often,” because certainly 80% of the customers weren’t even doing that. They were buying the crib and then they never came back.

I went into our email software and just designed a very simple post-purchase email campaign, so it was triggered at the initial purchase when that initial purchase included a crib, and two weeks later it went out with an email that highlighted all the bedding offers we have, the crib bedding, the baby bedding offers we have.

That’s it.

You know what?

It got 10% lift on frequency, so 10% more people ordered the baby bedding than before. Again, some of these people were going to come back anyway. There was no offer in that subsequent email. All it was doing was showing the offer, or showing the options that we had. What it was doing was decreasing the friction to a second purchase for something that made sense. It was greasing the skids of customer interaction, I like to say [inaudible 00:07:38]. I don’t like to say it much. I don’t like to say it at cocktail parties, but that email was greasing the skids of customer interaction, of customer behavior.

I would encourage you now, to look at your customers. You don’t have to do any database marketing here. Just think about it. Look at your products and say, “Okay, does it make sense that, you know, somebody who comes in and buys the iPhone on day one, buys the case a couple days later, and yeah, some of them buy it at the same time, but, you know, there’s a big segment, I bet, that doesn’t.

You know, they buy it. They want to make sure they like it first before they buy the accessories to it. They come back and buy it later.” What you want to do is just have a very simple follow-up email that highlights all those related products or those complimentary products. I call it the 1-2 Punch. The first punch is like a left hook with the first product, and then you get them with the second punch, which is right to the gut of baby bedding, you know, two weeks later, and it knocks them right out.

You know, 10% increase in your retention is huge. Right? I mean if it compounds over a year, at least for us at Design Public, that was hundreds of thousands of dollars in that one email campaign that literally took me a couple of hours to set up. I’m not pushing any apps here. I’m not pushing … You don’t need anything sophisticated. Just log into whatever email software you use and do a basic triggered campaign that runs after purchase.

Now, if you are a seven figure retailer, eight figure retailer, then yes, there are plenty of ESPs, email software providers, that do this out of the box automatically. [Enclavia 00:09:31] has got a recommended products engine. You can use that. I know Rare.io, Customer io, a lot of these can get more sophisticated and do this kind of thing automatically, but if you want a quick win now just go do it. Choose your top two or three products that people are buying, and then what’s complimentary to them, just do your related items through your email software. It’s a quick 1-2 Punch Campaign, and it really works to increase your frequency.

A couple of other good podcasting episodes I have on frequency, I encourage you to go back and listen to episode six. That is a killer retention podcast, episode six and seven, but in particular six will tell you how to take this 1-2 Punch and add some discounting and other things on top of it, and turn it into a nice lights out retention program.

Also, if you are not near your computer right now, next time you are on your computer, go to nerdmarketing.com/27, that is this episode, and you can download the show notes. You can also download a mind map I’ve made with some of my top frequency enhancing, top retention enhancing techniques, so it’s sort of a brain dump, but it helps to look at it visually. You can download that at the episode landing page.

Last but not least, I really encourage you to check out my free course on doubling your ecommerce business in one year. That’s my goal for you. My goal for this podcast is to double your business in a year. It can be done, and it can be done by sort of a fanatical focus on those three multipliers I talked about earlier.

That free course called Double Your ecommerce is located at nerdmarketing.com/double.

Lastly, if you’re doing six or seven figures per year, and you want to 10X your business, I am running a mastermind this fall. It’s a growth machine mastermind designed to take a lot of these database marketing techniques I talk about on the podcast and put them into action for you, with you.

You can find out more about that at nerdmarketing.com/mastermind. If you’re not at your computer, text nerdme, one word, to 44222, that’s 44222, and I will send you everything I talked about in this episode. I’ll send you the mind map, and I will send you these show notes as well as a link to the course. That’s nerdme, one word, to 44222.

That’s all I have for this episode. Thanks for listening, and remember the classics are important. They really are important. Jane Eyre, another classic, you know? Anything that Dickens wrote, Judy Blume. Don’t get the kids started on Star Wars at age four. Take my recommendation, get him started on the classics, and everything will be copasetic. All right, this is Drew Sanocki, Nerd Marketing. Thanks for listening.